Wednesday, August 22, 2012

Gold hits Rs 58,050 a tola

The price of
the precious yellow metal has rallied to yet another high in the domestic market on the
improving prospects of the European debt crisis. Gold was priced at Rs 58,050
per tola (11.664 grams) in the domestic market.
The international bullion market saw gold reach $ 1,640 on positive cues of
declining yields of European bonds following the possibility of the European
Central Bank (ECB) taking concrete action to deal with the ongoing debt crisis,
according to bullion analysts.
The demand for jewellery in the domestic market has also been hit due to the
scaling gold prices despite the approaching festive seasons. “Increased prices
have affected demand, and customers are preferring to recycle old jewellery
instead of buying new ones,” said president of Nepal Gold and Silver Dealers’
Association Tej Ratna Shakya.
"However, we expect better demand during Teej and Dashain,” he added.
Recent rumours regarding the ECB’s attempts at capping Spanish and Italian
borrowing costs alone led to Spanish, Italian and Portuguese yields going down
and fuelled interest in gold, despite the ECB’s denial of any such step. On
June 19, the domestic market had seen a record price of Rs 57,700 for a tola as
the precious metal was priced at $ 1,630 per ounce in the international bullion
market in the days following the Greek elections.
The appreciation of the dollar against the Nepali rupee has also caused the
price of gold to surge even though gold is yet to hit $ 1,900 per troy ounce as
it did in August 2011.
Due to the soaring prices against the mellowed down economic growth, the global
demand for gold has shrunk in the second quarter of 2012 by seven per cent
amounting to 990 tonnes, as compared to the corresponding period of 2011,
according to the World Gold Council’s report.
The amount has gone down mainly due to lowered demand for jewellery in India
and China which account for half of the world’s gold demand.